Auto leasing has declined for the first time in four years, according to the latest Lease Market Report from Edmunds.
Edmunds analysts found that leasing made up 31.1 percent of new-vehicle sales in the first half of 2017, down from a record high of 31.9 percent in 2016. That's a drop of 4.4 percent, twice the rate of decline for overall sales, which are down 2.2 percent year over year.
"Leasing remains a popular choice among car shoppers, but the era of steady growth is over," said Jessica Caldwell, Edmunds executive director of industry analysis. "This year we're seeing a drop-off in trade-ins going toward leases, signaling that the pool of people opting to lease is shrinking. Automakers are becoming more reliant on buyers already in the leasing cycle and first-time car buyers."
Still, for buyers who prioritize low monthly payments over long-term ownership, leasing can offer significant savings.
For example, the average monthly finance payment for a Ram 1500 pickup is $622, while the average lease payment is $392, which works out to 36.9 percent less. Buyers of Chevrolet Silverado 1500 models pay an average of $653 per month, and lessees save 35.8 percent with an average payment of $419. And those who opt to purchase a Ford F-150 spend an average of $662 monthly, compared to $470 for those who lease, a savings of 29 percent.
Similarly, consumers who lease a Honda Civic save 31.5 percent compared to those who buy, an average of $266 per month versus $388. And those who take out a lease on an Toyota Camry realize a savings of 27.7 percent, averaging $282 per month compared to $390 for buyers.
Many shoppers use leasing as a way of getting into luxury brands with comparatively low payments. For instance, a lease on a Cadillac XT5 averages $524 per month versus $738 for financing, a savings of 29 percent. And the average cost of leasing a Mercedes-Benz E-Class is $747 monthly compared to $905 for buying, which computes to a savings of 17.5 percent.
"We may be hitting a ceiling on leasing, but automakers will continue to keep feeding the machine because it's a selling tool that's too valuable to neglect," said Caldwell. "Leasing remains an incredibly popular way for consumers to afford the cars they want, so automakers are digging deeper to offer the eye-catching payments consumers have come to expect."